Remember after Dot Com 1 (as we’re calling it) melted down and there were Aeron chairs being auctioned off like there was no tomorrow? Well the auctions are springing up again and foreclosed homes are the new Aeron chairs.
FT: Across the UK, the US and, increasingly, continental Europe, property auctions are buzzing like never before. This is partly due to the subprime mortgage meltdown, rising foreclosures and an increase in sales due to financial distress. But concerns about a prolonged recession and widespread redundancies have prompted even solvent developers and individual homeowners to try auctions as well, attempting to create a bit of urgency in an otherwise stagnant market. As a result, the offerings now available through real and online bidding rooms include a broad range of properties at bargain prices.
The Essential Information Group, which tracks property auction information in the UK, says more than £2.5bn of property was sold at auction from the third quarter of 2007 to the second quarter of this year, a 46 per cent rise on the same period four years ago. It is a similar story in the US, where the total gross sales of residential real estate sold at live auction increased by 46 per cent from 2003 to 2007, according to the National Auctioneers Association. Although there are no statistics yet for this year, in a recent survey by the NAA, 48 per cent of auctioneers reported more interest from clients wishing to sell personal property through them. And, even in Europe, where there is no tradition of selling homes at auction, the sector is taking off.